Icelandic Group sells seafood services arm – Fishupdate.com

Icelandic Group sells seafood services arm Published:  03 January, 2007

Icelandic chairman Magnus Thorsteinnson

THE Icelandic Group is planning to sell its entire shareholding in VGI, a company specialising in providing a wide range of inclusive services for seafood producers.

The Group, which has seafood manufacturing plants around the world, including Coldwater and Seachill in the UK, said the agreement will become effective this week when the new owners, who have not yet been announced, are expected to take over the company.

The share price amounts to 270million Icelandic Krona – or around £19million sterling – while the book value of the company is estimated at 81.4million krona or about £5.8million.

VGI does business with most of the largest seafood companies in Iceland, boasting good service, quality and a special relationship with its customers. It says: “Our aim is to provide all-inclusive services for seafood producers when it comes to packaging and supplies for the production. Our slogan translates “All in one place”, which emphasises that our customers do not have to go elsewhere for these goods.”

VGI says it is able to remain competitive because of its bulk buying abilities. The company also sells packaging for freezing at sea and in land-based plants, along with industrial clothing and protective wear geared to the trawling and fish processing industry.

Icelandic have not stated why they are selling such a successful operation, but the answer probably lies in an earlier statement signalling the company’s intention to strengthen its seafood manufacturing business in Europe and the rest of the world. The sale will also give them a £19million cash injection to help them carry out that plan. Icelandic chairman Magnus Thorsteinnson said recently: “We have a very strong presence in the frozen and chilled seafood market and we need to continue to strengthen this position by becoming more profitable and branching further into value added products. We will do this by innovation and by entering new market segments.” He added: “At the same time, we want to become more efficient and productive in various other fields. We can do this through innovation and by entering new market segments.”

Icelandic has also been carrying out a series of radical restructuring programmes in a bid to boost profitability, including moving some of its frozen production from Coldwater, Grimsby to a newly acquired frozen fish plant at Wimille in Northern France. Then just before Christmas it announced the closure of a large seafood plant at Cambridge, Maryland, moving production to a more modern operation at Newport News, Virginia.

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